Ahead of the assembly elections, FHRAI submits representations to political parties chiefs requesting policy reforms for hospitality sector in Punjab

Ahead of the assembly elections, FHRAI submits representations to political parties chiefs requesting policy reforms for hospitality sector in Punjab

  • Reduction Of Liquor License Fee By 50%
  • Direct International Flights from Mohali
  • Revised Power Tariff For Hospitality Sector
  • Reduction Of VAT On Sale of Liquor
  • Adequate Municipal Services To The Hospitality Sector
  • Provision of Land at Subsidized Rates to Hospitality Projects
  • Subsidies and Incentives
  • Implementation Of Ease of Doing Business

India’s apex Hospitality Association and the voice of the hospitality industry – Federation of Hotel & Restaurant Associations of India (FHRAI) has submitted a representation to the Hon’ble Chief Minister – Shri Charanjit Singh Channi requesting for policy reforms for the survival and growth of the hospitality industry in the State. With Assembly elections underway in the State, FHRAI has submitted the representation also to the Chiefs of contesting political parties including the President of the Bhartiya Janta Party – Shri Ashwani Sharma; President of the Aam Aadmi Party – Shri Bhagwant Mann and the President of the Shiromani Akali Dal – Shri Sukhbir Singh Badal. The Association has appealed for a facilitative environment for the survival and revival of the hospitality sector in the State by implementing the requisite policy measures by the new Government.

“The State of Punjab has always been a preferred tourist destination in the country and accordingly, has been a favoured location for the hospitality sector as well. Many renowned hospitality groups have been operating businesses across cities, while many others are eyeing to make an investment in the State. However, today the hospitality industry is facing an existential crisis across the country including establishments in the Punjab. Against this backdrop, we request the Government for bringing in some much-needed policy reforms for our industry. Among these, our foremost request is that the liquor license fee be reduced by 50 per cent for all categories of hotels and restaurants for next 5 years to support the recovery of industry in the State. The current license fee of INR 5 lakh per year for 5-star hotels is too high for the pandemic-hit industry. We also request that the VAT on sale of liquor in hotels and restaurants be reduced to 7 per cent from existing rate of 14.41 per cent. Power constitutes a significant operational cost for all hotels and restaurants. For the industry to recover losses incurred by it during the pandemic, it would help if the power tariff for the sector were to be revised from the existing tariff of INR 6.91/KWH to INR 5/KWH,” says Mr. Surendra Kumar Jaiswal, Vice President, FHRAI.

Among other requests, FHRAI has requested that the Government to open direct international flights from Mohali International Airport to countries like Canada, USA and Singapore, among others for improved air connection for the millions of Punjabis living in these countries.

“Facilitating international flights from Mohali will not only be beneficial for the residents of the State and its people living abroad, but it will also give a strong boost to the tourism sector. Other than this, the State Government needs to facilitate adequate and organized municipal services and infrastructure to hospitality sector. Proper access or approach roads with signage and door to door garbage collection facility are some very basic requirements that are required. More importantly, the number of statutory and regulatory compliances including licenses, certificates, permissions and NOCs required for hospitality projects need to be rationalized and reduced,” adds Mr. Jaiswal.

Hotel projects being highly capital-intensive with land costs being a major component of investment, FHRAI has asked for the Government to provide land at subsidized rates. It has requested the Government for industry status to the sector for eligible hotels to benefit from the industrial rates for power supply, water supply, taxes and other payments instead of being charged at commercial rates.

“Offering land at subsidized rates will play a pivotal role in attracting new and prospective investors to the sector which has the potential of highest multiplier effects on job creation. Also, it is imperative that investment subsidies and tax holidays are granted for investments in STPZ’s and other tourism projects implemented in the State. This will augment growth of tourism and hospitality in Punjab, exponentially. The Government is also requested to grant industry status to the hospitality industry by following a simple web-based registration process like the Udyam Registration of MSME. The eligibility for the industry status would be based on hotels with valid licenses, statutory registration such as GSTIN. India is facing tough competition from neighbouring destinations especially due to the higher rate of GST here and other factors which make the total tourism package expensive to India. Hospitality Industry should not be treated as a ‘Sin Industry’ and so GST rates on room tariffs should be reduced and Input Tax Credit (ITC) should be permitted for GST charged on food. We request the Government of Punjab to make required recommendations in this regard,” concludes Mr. Jaiswal.

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